Mixing Housing and Family

RedXIV

Hi all,

Just looking for some feedback on whether this idea is a bit bonkers or not. I've read countless times that you shouldn't mix family with business, hence the reason I'm asking about this. I've been thinking about buying a house recently and with my family of three kids, I'd be looking for something sizeable. My parents built a big house in the late 90s that they are starting to say is too big for them to maintain. They are also thinking of moving closer to work in a smaller house (outside dublin so they aren't in for a severe hike in price to do so). It all appears to be a bit finger in the air at the moment but it got me thinking and I'm just wondering if there are any pitfalls to watch out for. I'm thinking there could be two seperate scenarios that we could proceed with:

• I buy the smaller house that they choose and we do a straight swap, with whatever implications comes with that.
• I buy their existing house from them and then they take the money and buy what they want.

With Option 1, I feel like I may be "cheating" them out of some of the value of their home so I'm not massively keen on the idea unless I "gift" them a certain amount (which may have tax reprecussions?), but I thought it may be simplier in the long run for us to buy one house and get the swap rather than going through a purchase on one house by us and purchase on another by them.

It's worth pointing out that I have a very good relationship with my parents that I'd like to keep And also, even if I said I was definitely on board, it'd be 2 years maybe before I'd have the capital to do this.

Just wondering if there is anything people would suggest or advise in this situations.

Cheers!
Red

Mrs OBumble

I would suggest professional tax advice: there are various ways to things to minimise your tax liabili.

mel123

Have you got siblings?

RedXIV

Mrs OBumble wrote: »

I would suggest professional tax advice: there are various ways to things to minimise your tax liabili.

This I would definitely look into, I guess I was hoping someone would have a bit more detail about what this would entail

mel123 wrote: »

Have you got siblings?

Yep but neither in a position to even consider buying a house for the next few years. Both single and enjoying life in Dublin

Graham

If you're talking about buying your parents house for the full open market value I can't see why there would be any tax implications assuming it is their full-time home.

Angel2016

RedXIV wrote: »

This I would definitely look into, I guess I was hoping someone would have a bit more detail about what this would entail



Yep but neither in a position to even consider buying a house for the next few years. Both single and enjoying life in Dublin

Yeah but remember your parents large house now will eventually become part of what is split between the three of you and in their eyes you could be doing them out of their inheritance if you make the wrong move, I am sure they are not greedy people but its something you need to think about.
Get professional advice but option 2 sounds more ideal to me you can buy the larger house give money to your parents they can do what they want with it and its all above board.

mel123

RedXIV wrote: »

Yep but neither in a position to even consider buying a house for the next few years. Both single and enjoying life in Dublin

You think that doing a straight swap with a house and they will be ok with it? Now im just assuming the smaller house is of lower value than the bigger house. You might think they wont have a problem with it, but i think its safe to assume no matter how tight you are with them, if they think you are getting something they are not, thats when things start getting nasty/messy! Just be very careful. Inheritance/property/money all do very strange things to families thats all i am saying, and i have seen it first hand on a number of occasions from people who you would never even think of.

Estrellita

RedXIV wrote: »

Yep but neither in a position to even consider buying a house for the next few years. Both single and enjoying life in Dublin

What is going on in their lives is irrelevant. They may feel you are doing them out of inheritance. Often these situations don't go well, and it causes family rifts. Happened in one of my parents families, some of them still not talking best part of 15 years now.